In Lesson 1, we spoke of markets and their role as both a process and arena for making production, consumption and allocation decisions. In this lesson, we will introduce the fundamental tool for analysing how markets work: the supply and demand diagram. After this introduction, we will take a deeper dive into one side of the market, the demand side. We will examine why people make the consumption choices they make, and how we can map these choices into a functional relationship between price and quantity consumed.
What will we learn?
By the end of this lesson, you should be able to:
- define and explain the concept of declining marginal utility;
- read a demand schedule and convert it into an individual demand curve;
- aggregate individual demand curves into a market demand curve;
- define and calculate price elasticities of demand.
What is due for Lesson 2?
This lesson will take us one week to complete. Please refer to Canvas for specific time frames and due dates. There are a number of required activities in this lesson. The chart below provides an overview of those activities that must be submitted for this lesson. For assignment details, refer to the lesson page noted.
|Requirements||Submitting Your Work|
|Reading: Chapters 3 and 7 in Gwartney et al. OR Chapters 3 and 5 in Greenlaw et al.||Not submitted|
|Lesson Homework and Quiz||Performed in Canvas|